Wednesday, October 31, 2012

Finding the Right Customer for Your Small Business

We find that often, too many businesses try to sell everything to just about everyone. They forget that selling is not just mere unloading products, but answering a real need or want, and making customers happy and satisfied.

You may be able to make a sale, but when you do not stop and analyze if you are selling to the right people, there is a huge chance you'll never see them again. One thing must be kept in mind - not all customers are created equal. As a business owner, it is wrong to try to serve all customers if you want long lasting business relationships.

So how does one go about finding the "right" customer? The answer is a 2-step process:

Step #1 - Understanding your business. Before you should think of selling, you must first understand your own business. What do you sell? Are you selling a product or service that may be used by all, but not necessarily vital for some people? Something vital for most age groups is life insurance, but it may not necessarily fit some niche's tight budgets. Do you believe in high quality but high price, or are you selling average quality products with low prices? Are you selling globally - do you think your winter apparel can be worn in Asia? Are you willing to give excellent customer service? All these questions help you analyze exactly what your ideal target market is. This brings us to the next step…

Step #2 - Identify your ideal customer. After determining the values your business can give, you are now ready to assess what types of customers fit your ideal target market. You can now determine how you must align your marketing strategies to fit a certain group of people.

Assign customers according to market segments. The trick is to define the wants and needs of a particular segment, and work towards answering that need.

Based on demographic. Look for customer characteristics predominant in a particular age group, income bracket, marital status and other similar statistics. Zeroing on one or two good customer niches is a wise idea - you'd have better chances of landing a sale with a great client who will most likely be back for a second purchase. This is because you have answered a specific need.

Based on location. Divide your customer base according to geographical location. This is especially helpful for food and utility businesses, because this will determine how quickly you can deliver or get to your customers - thus decreasing the possibility of complaints due to inability to get to some demanding customers at the quickest possible time, also helpful when you sell globally - to estimate shipping and delivery time. Don't forget also that people from different geographical locations base their needs on climate, culture, religious practices, and practical preferences.

Based on need. This approach looks at customer needs and aggregates customers with similar needs in various segments. For example, health advocates have different menu preferences, or that more senior clients have a dire need for easy to use and convenient products.

Once you have determined which customers are "right" for your business, make sure all other aspects of your business are in congruence with the needs of your customers. Not having harmony in all areas will result in confusion, which may hurt your business. If you want to satisfy the Tiffany-purchasing market, then don't decorate your office with Salvation Army furniture. Be consistent.

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